Editorial: Gov. Corbett to the rescue? Not on pension reform

It's a bird. It’s a plane. It’s ... another government report telling Pennsylvanians what they already know: We have $41 billion in public pension obligations, and it’s scary.

If Gov. Tom Corbett is serious about tackling this key issue, he should put out real solutions, not more reports detailing the problem.

By now, most people understand how we got in this mess. They are aware that former Gov. Tom Ridge approved higher benefits for public sector workers from the governor and judges on down the line to teachers and janitors.

They are aware that the stock market has not been kind in the last decade and returns have been sub-par. And some also are aware that under Gov. Ed Rendell, school districts and the state were allowed to underfund or even skip their pension payments.

We all understand the mistakes, but the Keystone Pension Report that was released last week with much fanfare from Corbett’s budget office did nothing to further the debate on what to do about the crisis.

The supposedly bold proposal in the report is to switch new employees into a 401(k) style plan. That’s great, but it won’t put a dent in the $41 billion deficit. It’s akin to trying to fix a big hole in someone’s roof with kid’s glue.

Dealing with Pennsylvania’s problem boils down to two scenarios: Raise more revenue or try to go to court to claw back some of the benefits that have already been earned or promised.

Both options are highly unpopular with the public. No one wants to pay more in taxes, but no one wants to see benefits cut that family and neighbors have earned.

As public workers rightly point out, they were not only promised those benefits, but they have been contributing money every year for them, even if local school districts and governments haven’t been keeping up their end of the deal.

Going to court offers no guarantees. There is a lot of legal precedent that is on the side of the workers. It will be a long fight that could easily take years. After all that, the state could end up in exactly the same place it is now if the court rules in favor of the workers and retirees.

On the other side, no one wants their taxes raised. Times are tough, and as a state with a lot of retirees, property tax increases can make a legitimate difference in the ability of a senior to survive. But there are other sources of revenue than individuals.

The Corbett administration and state lawmakers should consider imposing a real severance tax on Marcellus Shale drilling and use the proceeds to pay off the pension debt.

Just last week, Corbett’s energy executive and Department of Environmental Protection secretary published an op-ed in this newspaper touting all the growth and benefits of the industry.

It’s clear the natural gas drillers aren’t going away. They are established now and will likely be here for a half-century or more.

Yet for all there is to celebrate about the industry, many Pennsylvanians feel the drillers are not paying their fair share. They’re right. The so-called “impact fee” that was enacted in January is arguably the lowest in the nation on this kind of drilling.

No one wants to tax drillers away, but there’s a “Goldilocks tax,” and Pennsylvania is well below that. When the impact fee was passed last year, various forecasters projected that the state left $24 billion to $48 billion on the table by not passing a higher tax. Imagine what that money would do if it went to pay off the state’s pension obligation.

It’s an idea worth exploring. Fixing the state’s pension hole would make Gov. Corbett a real hero. Right now, all he is offering is hot air.